Osborne insists RBS boss Stephen Hester 'decided to go'

Chancellor George Osborne has insisted Stephen Hester made the decision to
quit as head of Royal Bank of Scotland (RBS) following claims that he
effectively forced him out.

George Osborne said Stephen Hester "decided to go" but added that his "consent and approval" was sought.

10:54AM BST 18 Jun 2013

The Chancellor said the banking chief executive "decided to go" but added that his "consent and approval" was sought.

"Stephen decided to go and did that in discussion with the board of RBS," he told BBC Radio 4's Today programme.

"Let's be clear, it was a decision of Stephen Hester and the board but, of course, as the person who represents the taxpayer interest, and we have got a huge stake in the Royal Bank of Scotland because the previous government put a huge amount of taxpayers' money into it, of course my consent and approval was sought."

Mr Hester announced he was to leave the state-backed bank last week and said he had "mixed feelings" about his departure.

But the decision - rubber-stamped by RBS’s board at a meeting in London last Wednesday afternoon - came after the Treasury, led by Chancellor George Osborne, indicated that it wanted to return its stake to private hands by the end of 2014.

Mr Hester, who has run RBS since the height of the financial crisis in November 2008, has repeatedly said that he wanted to see through the privatisation process himself.

Sir Philip Hampton, the bank’s chairman, admitted the decision to ask Mr Hester to step down followed a series of discussions with the Treasury.

Sir Philip admitted that he had discussed the issue of succession with UK Financial Investments (UKFI), which manages the Treasury’s 81pc stake in RBS, as he had with other investors.

He has since asked one of the City’s best known head hunters, Anna Mann, to lead the search for a new chief executive for the bank, suggesting that neither Sir Philip nor Chancellor George Osborne had identified a successor to Mr Hester in advance, adding to speculation that his surprise departure was sparked by a sudden disagreement.

Ms Mann, of MWM Consulting, is one of the City’s most influential and best connected recruiters, having helped place Ian Davis as chairman of Rolls-Royce and Sir David Walker as chairman of Barclays.

Mr Osborne also confirmed he will set out the next steps for state-backed banks RBS and Lloyds banking group tomorrow in his annual Mansion House speech.